Bankruptcy is a very bad situation to be in, for any individual or an organization. But even in the tough times, there are ways out to tackle such situations. Bankruptcy Chapter 13 code which helps individuals only, to come out of financial crisis under the guidance of a federal bankruptcy court. A debtor with a regular income can restructure his financial position with the help of Bankruptcy Chapter 13 code. In this the debtor has to propose a plan with the help of which he or she can repay all his outstanding debts in 3 to 5 years of time period. And five years is the maximum time period of the repayment plan.

In reality the Bankruptcy Chapter 13 code has many added advantages over the chapter 7 bankruptcy code. Unlike the chapter 7 bankruptcy code, in the Bankruptcy Chapter 13, the individual can atleast save his house and other assets from foreclosure. All the proceedings will come to halt after he files for Chapter 13 and also get a period of 3-5 years to pay back his debt to the creditors. The Bankruptcy Chapter 13 code allows an individual to reallocate secured debts. It can over a period of time, lower the payments which he has to make. Finally the debtor will not have any connection or contact with the creditors while he or she has filed the chapter 13 bankruptcy code.

Now let us see the eligibility criteria of filing the Chapter 13 bankruptcy code. Any person, either self employed or working in any organization can file chapter 13 and seek protection under it. The only condition on this is that his unsecured debts should be below $336,900 and secured part of the debts lower than $ 1,010,650. And no corporate or organization can seek help or file chapter 13. And the individual cannot file for chapter 13 or other codes if his bankruptcy petition was dismissed in the preceding 180 days before.

Then coming to the working of the chapter 13 bankruptcy code which basically begins with filing of the case in the federal court stating the area where the debtor resides. The debtor has to produce certain documents stating his present income and expenditure, his liabilities, unexpired leases, and his financial status. Apart from that he or she also has to produce a certificate from a approved credit counselor stating that he has undergone a credit counseling and a copy stating the debt repayment plan.

Then there are some predefined fees for filing a case under the chapter 13 bankruptcy code which can also be paid in installments. Once the bankruptcy code is filed all collections against the debtor is stooped with immediate effect. If the debtor pays the dues on time under the chapter 13 he is safe from losing his home else he can even lose his home for mortgage payments. Within 50 days the trustee arranges a meeting with the creditors and the debtor is put to several questions. And a plan is arrived how the debtor will repay his loans in a feasible manner.

The debtor has to stick to the repayment plan, and if by chance he fails to make regular payments, the federal court has the total rights to dismiss the case and change it to a liquidation case which is mentioned in chapter 7 bankruptcy code. So once an individual files for the bankruptcy chapter 13 code then he has to religiously follow the repayment plan and make the payments back within the schedule time so that he solves the financial crisis easily. This is how a Bankruptcy Chapter 13 code proceeds generally in the federal court.

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